Baroness Thatcher did not want a state funeral and thought a fly-past over the service would be a "waste of money", her friend and spokesman Lord Bell has revealed.
Some Tory MPs had called for a state funeral like the one for Winston Churchill.
But instead she will receive a ceremonial funeral with full military honours at St Paul's Cathedral in line with her wishes, Lord Bell said.
Lord Bell said: "She specifically did not want a state funeral and nor did her family. She particularly did not wish to lie in state as she thought that was not appropriate.
"And she didn't want a fly-past as she thought that was a waste of money - somewhat in character you might think.
"She expressed those views to me personally and she will get what she wanted."
Lord Bell's comments came after several Tory MPs said Lady Thatcher should be granted a full state funeral.
Alun Cairns of Vale of Glamorgan wrote on Twitter: "Margaret Thatcher deserves a state funeral after transforming our nation in such a positive way. The changes were never reversed."
Dover and Deal MP Charlie Elphicke said he thought Lady Thatcher should receive a full state funeral but he respected the family's wishes.
He said: "My personal view is that an appropriate celebration of her life would be a state funeral with full honours. However, I understand that her and her family's wishes were not to have that and I respect that."
Following the news of Lady Thatcher's death, an epetition was quickly set up on the government's website demanding that no state funeral be held with similar feeling expressed on Twitter via the #nostatefuneral hashtag.
The epetition was soon changed when it became clear that her funeral was not a full State affair but a ceremionial one and now reads:
"In keeping with the great lady's legacy, Margaret Thatcher's state funeral should be funded and managed by the private sector to offer the best value and choice for end users and other stakeholders.
The undersigned believe that the legacy of the former PM deserves nothing less and that offering this unique opportunity is an ideal way to cut government expense and further prove the merits of liberalised economics Baroness Thatcher spearheaded."
The route from the Church of St Clement Danes will be lined by personnel from the RAF, Navy and Army before it is met at St Paul's by a guard of honour. Members of the armed services and pensioners of the Royal Hospital Chelsea will line the steps of St Paul's.
Former colleagues, as well as the prime minister David Cameron and deputy prime minister Nick Clegg, will be invited.
Flags will continue to be flown at half mast at Downing Street on Tuesday, and will be again on the day of the funeral.
In Monday's statement, Downing Street said that Lady Thatcher's family have asked that if people wish to pay their respects, they consider making a donation to the Royal Hospital Chelsea, rather than laying flowers.
The Number 10 website will have a condolence page on which people will be able to write private messages for the Thatcher family.
The public will be unable to attend the funeral service itself but can line the route of the funeral procession from the RAF Church in the Strand to St Paul's Cathedral.